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Old 09-05-2014, 08:04 AM   #41
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DW and I plan on waiting until age 70 for two reasons: The bigger, COLA'd benefit will serve as both longevity insurance and a hedge against inflation. That lessens the need to mitigate these risks using things like (deferred) annuities and TIPs.
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Old 09-05-2014, 08:30 AM   #42
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I was seriously considering taking it at age 66 for a while because I was getting awfully tired of waiting! But then (thanks to the forum!) I discovered that I could take divorced spousal SS at 66 and my own SS would continue to grow until age 70, when I would switch over to it in order to get larger benefits. <snip>

It is SUCH A KICK to see that direct deposit showing up each month and knowing it will happen again the next month, and the next, and the next....
Yeah, I've been thinking all along that spousal benefits don't matter in my case, but the idea of getting half of DH's when I hit 66 (I'm 61 now) and letting mine accumulate is a good middle ground. Half of DH's is less than what I'd get at 66 on my own record, but the financial benefits of waiting till 70 to collect on my own might be worth it.

I know what you mean about regular payments. I get a small ($932/month) pension from work at a former GE sub, which starts at age 60 whether you want it to or not. I LOVE seeing that money come in every month even though there's no COLA adjustment and it will probably be enough for the monthly grocery bill when I'm 80.
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Old 09-05-2014, 11:49 AM   #43
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DW and I plan on waiting until age 70 for two reasons: The bigger, COLA'd benefit will serve as both longevity insurance and a hedge against inflation. That lessens the need to mitigate these risks using things like (deferred) annuities and TIPs.
Surely one of you will take spousal at FRA?
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Old 09-05-2014, 01:18 PM   #44
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Surely one of you will take spousal at FRA?
Yes, then switch to own benefit at 70.
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Old 09-05-2014, 01:19 PM   #45
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Recently retired from after 42+ years with two corp, just turned 61. Two pensions and two 401K's. My fra is 66. I plan on taking ss at 65, this way I can apply for SS and Medicare at the same time.


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Old 09-05-2014, 05:45 PM   #46
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DH started SS at 62. For us it worked out to be the best solution because we have a pre-teen and a teenager... They can collect, as well, if he's collecting. (Something I learned about here.) This puts us well ahead of the game, financially.
In my case, I will be taking it at 62 (15 months) for the sole reason of the family benefit. We even timed our second child's coming birth to max it out.
The family benefit(not including my benefit) will add $500,000.00 to our nest egg and all will be paid out before 2035.

I plan to suspend my benefit at age 66 and restart again at age 70 in order to maximize my YW survivor benefit.

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It's unusual to have minor children at SS age, I guess... One slight advantage to marrying and having kids at an "advanced" age.
It is actually becoming popular among retired Expats with young wives and several of my friends were extremely grateful when I pointed this out to them!
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Old 09-05-2014, 08:35 PM   #47
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What I mean is that if I had to take the same amount of my SS benefit out of my IRA, I'd have to pay Mass State tax of 5.25% plus the full Fed tax instead of 87% of that amount.

As SS is (one of the few things) not taxed in MA, I'm already saving about $1300 a year, another $800 on the Fed differential, plus the amount that I got to leave in the IRA could/should make (but wouldn't make if I had withdrawn it).
For a good while now I had been assuming that waiting until 70 would be best. Recently, situations like the above have made me question that a bit.

In our case, we will be living with a state income tax of up to 9%, though that doesn't apply to SS. So I have been wondering if starting SS earlier, and not paying tax on it, would be better than taking out IRA money and paying tax on that. Of course that early SS scenario means larger RMDs, though the federal tax on the reduced SS would be somewhat less than the max SS scenario.
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Old 09-05-2014, 11:35 PM   #48
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Took it at 62.
1. My breakeven is 77 don't think I will live that long.
2. Calculated that it would take about 7 years just to get back what I put in, and that is not counting inflated dollars.
3. Immediate cash flow,no digging into IRA.
4 Wife should be fine with my pension and SS if I am gone first.
5. The gov't can't wait to stop your check, the first thing the funeral director did when we met with him about an hour after my mother died, was to call a special SS phone number to tell them she had passed. I was kind of miffed off.
Old Mike

mf15,

Totally agree with you on #'s 3-5!


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Old 09-06-2014, 05:02 AM   #49
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one factor i never include is what if i die ?

dying is dead ,game over. the question i always ask is what if i live or my spouse lives.

to many folks have this what if i die mentality and it ends up being the wrong question to ask yourself when making a social security decision and a poor decision at that. taking ss later is the one decision ever that you can never live to regret..

after all statistics mean nothing in life. they only mean something to insurers.

we only have two outcomes , either things work out as planned or they don't.
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Old 09-06-2014, 06:03 AM   #50
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one factor i never include is what if i die ?

dying is dead ,game over. the question i always ask is what if i live or my spouse lives.

to many folks have this what if i die mentality and it ends up being the wrong question to ask yourself when making a social security decision and a poor decision at that. taking ss later is the one decision ever that you can never live to regret..

after all statistics mean nothing in life. they only mean something to insurers.

we only have two outcomes , either things work out as planned or they don't.
Not always true!

Some of us take SS at 62 to protect a spouse impacted by GPO financially if we die first.
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Old 09-06-2014, 06:25 AM   #51
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still true, it isn't about you dying as much as it is about what if your spouse lives? the planning in that case is based on taking care of the surviving spouse in the best way you can.

i am not saying there are not reasons to take it early but i am saying just taking it early because you might die and give up a buck is a poor reason. there needs to be reasons based on what if you live to be considered if you are going to make a well thought out choice.
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Old 09-06-2014, 07:03 AM   #52
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I retired in 2009 after taking a early buy out. We did not have a lot of money in are 401K's but decided it was enough to give it a try. Then I decided to take SS at 62 because with my pension and SS we could pay all of our bills and still have a few dollars left over. Best decision I have ever made. Of course the market has been on a bull since I retired. Now I know why the experts say market performance makes a big difference in the first 5-8 years of retirement. Will I have less cash coming in when I am 80? Yes, but my buffer is now very large. Just lucky the market gave us a big retirement present.
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Old 09-06-2014, 07:45 AM   #53
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yep. timing is everything. a good bull run does wonders for the early ss money.

but something to keep in mind is most small investors suck at it and get but a fraction of the returns. but the real issue in many cases is the surviving spouse knows even less and they not only can't invest it they won't invest it.

the higher ss payment may really be to keep things simple and guaranteed for the financially less savvy spouse.

that is something i am trying to take in to consideration in my own plan. i am most likely going to utilize a deferred annuity,ss at fra and keep simple investments and the newsletter i have been following for 25 plus years just to keep it simple and somewhat guaranteed for her.

when my wife first became a widow from her first husband she threw everything in T-BILLS AND CD'S.

many women do not like risk at all as opposed to men.
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Old 09-06-2014, 08:24 AM   #54
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Hi,
Penny for your thoughts.

Have retired from my high paying job and now work part time making less then the SS limit. Wife works full time with benefits(you could say
I am a kept man) and we both have access to 401ks. My thought is to collect SS at 62 and max out her 401k and continue to live on my part time work and the remaining of hers. Would this be enough of a tax saving ?

both are 62 and the difference between taking ss at 62 and 66 are $6,0000 and have $700K in Ira and 401k.

thanks
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Old 09-08-2014, 08:10 AM   #55
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You can do all the calculations you want and look at your genes etc. But know one knows when your going to die. I know lots of people that never collected SS and they kept working to get the higher amount. I also know many people that died before 65. Think it over.
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Old 09-08-2014, 08:19 AM   #56
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when my wife first became a widow from her first husband she threw everything in T-BILLS AND CD'S.

many women do not like risk at all as opposed to men.
I know what you mean. I'm female and love investing, but my mother (equally intelligent but not into it) just wants to know there's enough money left that she won't run out. Fortunately, Dad is still managing their money, but we've agreed that I'll be in charge if he can no longer do it. (Considering that I have one brother who's a CFO and another who's a tax partner with a major firm, I'm honored.)

I'm most likely to going to file at 62. I might at FRA. Odds are I'll live to a ripe old age, which is why I'm waiting. If I'm wrong, well, then, I certainly won't outlive my savings.
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Old 09-08-2014, 08:26 AM   #57
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You can do all the calculations you want and look at your genes etc. But know one knows when your going to die. I know lots of people that never collected SS and they kept working to get the higher amount. I also know many people that died before 65. Think it over.
A good friend of mine was holding out for 65..."More money!!".
Pancreatic cancer had different idea and and with six months notice, took him at 64.

Take the money and run.
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Old 09-08-2014, 09:03 AM   #58
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If I'm 62 and don't need the SS money until later that's years of SS money I can put into investments.

$1,628 - Age 62 monthly payment
$2, 279 – Full retirement age (age 66yr 2 mo) monthly payment.

50 months between earliest retirement & full payment age.

$81, 400 (if the cash is just stuffed into a mattress)

$651 monthly difference in the payments.

If at full retirement age I just pulled $651 out the mattress each month, the cash would last 125 months (10 years 5 months). So if I take SS at the earliest date, just stack the cash without interest or investment, and start spending it later, I'm 76 and 7 months before I "break even".

If I die anywhere between age 62 & 76yr 7mo, there's a pile of cash there for the heirs that otherwise would not exist.

If the early cash is invested at 4% interest, the break even point becomes age 81 or so.

If I use the early cash to pay off the mortgage on a small rental property I have some pocket cash from the SS at age 62, and by age 66+ I have "free and clear" rental income that exceeds the full SS payment difference.

Yes, I know there are those who dislike rentals. I prefer that risk to the risk of SS disappearing.
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Taking Social Security at age 62
Old 09-09-2014, 10:16 PM   #59
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Taking Social Security at age 62

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If I'm 62 and don't need the SS money until later that's years of SS money I can put into investments.

$1,628 - Age 62 monthly payment
$2, 279 Full retirement age (age 66yr 2 mo) monthly payment.

50 months between earliest retirement & full payment age.

$81, 400 (if the cash is just stuffed into a mattress)

$651 monthly difference in the payments.

If at full retirement age I just pulled $651 out the mattress each month, the cash would last 125 months (10 years 5 months). So if I take SS at the earliest date, just stack the cash without interest or investment, and start spending it later, I'm 76 and 7 months before I "break even".

If I die anywhere between age 62 & 76yr 7mo, there's a pile of cash there for the heirs that otherwise would not exist.

If the early cash is invested at 4% interest, the break even point becomes age 81 or so.

If I use the early cash to pay off the mortgage on a small rental property I have some pocket cash from the SS at age 62, and by age 66+ I have "free and clear" rental income that exceeds the full SS payment difference.

Yes, I know there are those who dislike rentals. I prefer that risk to the risk of SS disappearing.

Well thought out and explained. I agree 100%. DW prefers to not be greedy and will take her SS at 62.


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Old 09-09-2014, 10:32 PM   #60
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still true.
Actually no...

Using the numbers and not emotions says in our case and with our objectives take SS early.
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